# Disability or Death: How Well Are You Really Protected? — innoVorsorge AG > Accident, illness or sudden death – many in Switzerland rely on AHV and pension fund. But that is often not enough. In this article you will learn how to identify coverage gaps and optimally arrange your protection in an emergency – with clear guidance and independent advice without sales interest. Adresse: https://www.innovorsorge.ch/en/blog/emergency-case Diese Fassung wird beim Bau aus dem Inhalt der Seite erzeugt. --- 4 Nov Written by Lukas Bachmann # Protection in an Emergency – A Guide #### Accidents, illnesses or strokes of fate – they never come as planned. #### And when they come, it is usually too late to change anything. That is why insurance and finances are an annoying topic for many – yet it is essential to engage with them precisely for the scenarios described above. In this blog post we cover everything you need to know on this topic and give you a step-by-step framework for ensuring that you are at least financially okay in an emergency. ![](https://www.innovorsorge.ch/blog/pexels-marcus-aurelius-4064339.jpg) #### Note: We are completely independent. As an independent company, we have not a single commission agreement with any insurance company or any other company. That is why you will not find any company names or recommendations with us. We educate and tell you how to proceed. ### Overview of Scenarios There are 4 different scenarios relevant to protection: ![](https://www.innovorsorge.ch/blog/Todesfall.png) - Disability due to accident - Disability due to illness - Death due to accident - Death due to illness Each of the 4 scenarios has different prerequisites and consequences. Let us look at them more closely. #### Disability due to illness – what does that mean concretely? If you **can no longer work due to illness (called incapacity for work or disability)** , a patchwork of benefits kicks in. These benefits are possible: - **Continued salary payments**: Legally regulated, can last between 3 weeks and 6 months. This depends on your years of service with your employer. - **Daily sickness benefit insurance**: From the end of the continued salary obligation, daily sickness benefits cover approx. 80% of your last salary. However, daily sickness benefit insurance is not mandatory for an employer. Smaller employers in particular often do not have such insurance, creating a gap. - **IV pension (1st pillar)**: Entitlement only after 2 years at the earliest and only with >40% disability. The degree of disability is determined by the doctor and determines the benefits you receive from insurance. You receive a full pension from a disability degree of at least 70%. You then receive an AHV pension calculated based on your previous salary until retirement (on average approx. CHF 1,800 per month). - **BVG disability pension (2nd pillar)**: If you have a pension fund connection through your employer, you also receive a disability pension there. How much depends heavily on your income and the pension fund. As you can see, a lot depends on your individual situation. However, the following problems are common in Switzerland: - Gaps between **continued salary payments** and **receipt of a disability pension**. If your employer does not have daily sickness benefit insurance, you are financially stranded after 6 months at the latest. - **Partial disability** is poorly covered. If you become only partially disabled, benefits from IV and the pension fund can quickly become vanishingly small. - Self-employed individuals or people with a large commission portion of their salary. For these people, the insured salaries and therefore the benefits they would receive in case of disability are often significantly lower than their current income. #### Disability due to accident – what does that mean concretely? If you can no longer work due to an accident, the situation looks different. Since accident insurance is mandatory for employers in Switzerland, you are already well covered as an employee in this regard. In case of disability, you receive about 80% of your last salary from the accident insurance from the 3rd day after the accident. After 2 years following the accident, this "pension" can even increase to 90% due to supplements from the disability insurance. **Conclusion:** Only 6% of all disability cases in Switzerland are caused by accidents. Therefore, accident insurance is cheap and usually sufficiently covered. For self-employed individuals, taking out accident insurance is therefore essential! #### Death (illness or accident) – what does it mean for surviving dependents In case of death, it depends **on how well you have arranged** what happens afterwards: These benefits ***could*** flow: - **AHV widow's/orphan's pension**: Only with marriage or children – often minimal amounts. Depends again on the income of the deceased person. - **Pension fund benefits**: Only if beneficiaries are correctly registered. This is often forgotten, especially in registered partnerships. - **3rd pillar funds**: Payout to defined persons – but often outdated or even incorrectly declared. Typical gaps we often see in consultations: - **Unmarried couples**: There is no entitlement to partner pensions from AHV. Often no entitlement arises in the deceased's pension fund either. And if so, only with a shared household of at least 5 years before death or shared minor children. In addition, due to very low tax-free allowances in inheritance tax, bequeathing to a life partner can become expensive. - **Patchwork families**: Legal inheritance often contradicts the will of the deceased and therefore must be specially regulated. - **Single parents**: Children often receive only minimal orphan's pensions. **Conclusion:** While it no longer matters to the deceased, the surviving dependents are often dependent on everything having been properly arranged during their lifetime. Especially for people with their own home, not regulating this can be costly. ### Concrete Guide: How to Proceed ☐ **Check your pension fund statement** – what does it say under "Benefits in case of disability"? Note the pension you would receive (Important: you only receive this pension for full disability; with a degree of disability of 40-69% you receive a portion of it). ☐ **Get an AHV pension estimate** – how much IV pension would you receive in an emergency? You can easily do an estimate online using the following link. Enter your details and average income (the IV calculates your past average income and extrapolates it to retirement). [AHV/IV pension estimate](https://www.ahv-iv.ch/en/Formulare/Online-Rentensch%C3%A4tzung-ESCAL) ☐ **Compare with your budget** – are these two pensions enough to live on in case of disability? Create a budget for this (what you would actually still have in expenses in such a case), without savings contributions, pillar 3a, etc. If the pension amount is greater than your budget – congratulations, you do not need to change anything. If not, the next point is relevant for you. ☐ **Check life insurance** – cover your gaps, but no more! If you already have life insurance, look at the policy more closely. Is a loss-of-earnings pension insured in it? You would also receive this in case of disability. Simply put: if you have a gap between pensions and your budget, you need loss-of-earnings insurance in the amount of this gap. If your existing policy covers this – perfect. If not: insure exactly this gap amount and nothing more. IMPORTANT: The big business of insurance companies consists of combining these insurances with lots of other stuff – death insurance, 3rd pillar, etc. Make sure this is not the case and avoid exorbitant costs. Do you have life insurance but are unsure whether it makes sense? We review the policy independently as part of our provision consulting and tell you what it covers and what it costs: [Provision & Protection Consulting →](https://www.innovorsorge.ch/en/provision) ☐ **Check daily sickness benefits** – clarify with your employer whether daily sickness benefit insurance is taken out for you. You can often find this information in your employment contract. Otherwise, ask your boss or HR. If it is not taken out, definitely insure this with an insurance company. Same principle as above, only insure what you need and nothing more! ☐ **For couples, nominate each other in the pension fund** – if not already done, definitely register your partner as a life partner with your pension fund. If you have lived together for more than 5 years or have shared minor children, this is possible. This prevents the other person from being left completely empty-handed in case of death. ☐ **Look at the death scenario** – what would happen if you died tomorrow? As a rule of thumb: if financially no one depends on you (partner, children, etc.), you do not need death insurance. If someone depends on you financially, the situation becomes very individual. Basically: check the need first before taking out expensive insurance. ### Why Independence Is So Important on This Topic Unfortunately, the only companies that currently look at this topic with you are insurance companies. They do it for free but clearly with the goal of selling you insurance. This alone shows why independence is so incredibly important on this topic. Because: - Insurance salespeople live on **commissions** - Many recommendations are **not need-driven but profit-driven** - People are often **over-insured** – and at the same time forget the essentials: **the costs!** **Example from our daily life:** A single man in his mid-20s has death insurance of CHF 100,000. No property, no children, no obligations. Completely pointless, right? No one is financially dependent on him. Completely wrong priorities, **triggered by sales pressure.** That is why it is so important to look at this topic with someone who can also honestly tell you when you are already well positioned and do not need new insurance. ### A Quick Word from Us If you now want to look at this with someone completely independent, want to save yourself the effort of a protection analysis, or have special questions: take a look at our provision analysis. In it, we analyze these exact points among others, but also discuss your general financial, provision and investment situation. Because we have no commission contracts, the consulting does cost something, but relative to the cost of taking out insurance you do not even need, it is still significantly cheaper 😉 And if you have read this far, use the discount code "INNO50" when booking for CHF 50 discount. [Learn more about the Provision Analysis](https://www.innovorsorge.ch/en/provision) ### Conclusion Anyone who has not arranged what happens in case of accident, illness or death leaves themselves and their loved ones to chance – or the state. The biggest gap does not arise from missing insurance, but from missing clarity. The good news: You do not need complicated products, but clarity. We hope to have given you a suitable guide with this article. [BackHow to Read Your Pension Fund Statement: The Ultimate Guide](https://www.innovorsorge.ch/en/blog/understanding-pension-fund-statement)[True Independence in Retirement ConsultingNext](https://www.innovorsorge.ch/en/blog/true-independence-in-retirement-consulting)